WH, Senate Dems “caving” on budget demands

posted at 12:15 pm on March 31, 2011 by Ed Morrissey

So say Chuck Todd et al at NBC, who collectively say that not only has Barack Obama and Harry Reid lost this particular game of chicken, they’ve stalled out on the side of the “deserted highway.” The $33-billion reduction figure is, after the cuts in the last two CRs, almost exactly what House Republicans first proposed at the start of the 112th Session of Congress. Not only has the White House failed to threaten any vetoes on the cuts, they also have apparently conceded on the “no riders” requirement, too:

If the current Washington fight over spending was a game of chicken, the Obama White House would already be pulled over on the side of the road, as House Republicans continue to barrel down the deserted highway. The fact is, the White House and Senate Democrats keep caving, while House Republicans — at least publicly — have yet to budge an inch. The latest development, as Politico reports, is that the administration has agreed to an overall cut of $33 billion, which is near the number that the House leadership originally proposed (before the Tea Party caucus forced it to go higher). And now the White House appears to be backing away from its demand that no riders be attached to the deal. Press Secretary Jay Carney said there is no veto threat from the White House on a deal that contains ANY riders, as was originally the position.

Allahpundit covered the Politico piece last night, so be sure to read more of his analysis. The sudden shift from Democrats — surrender, according to NBC — comes at a curious time, though. Howard Dean had begun drumming up support for a government shutdown rather than agreeing to cuts, arguing that voters would blame Republicans for insisting on spending cuts that amount to, er, 2.0625% of the projected deficit this year and 0.88% of the overall budget. Those rotten 98 Percenters did this! would be the presumed rallying cry, although as my friend John Hinderaker points out, the SuperSize Me argument isn’t likely to work:

If we use the Big Mac extra value meal analogy, a $33 billion cut in the federal budget represents the equivalent of ordering the meal; eating the Big Mac; drinking the Coke; and eating 85 out of 87 french fries. Then you take the 86th fry, bite off one sixth of it, and put the remaining 5/6 of one fry back in the box, along with the 87th fry. Is that a substantial cut? No.

True enough. But if we want to take the analogy to its next logical step, then a $61 billion cut — which is the bare minimum that Tea Partiers have demanded — would simply mean eating half of the 86th fry rather than one-sixth. In other words, it’s not going to make a lot of difference if fiscal sanity is the end game for these budget battles.

The end game has to be entitlement reform, and that won’t start until Congress clears the FY2011 budget off the table. Democrats, though, have other ideas about how to deal with overwhelming increases in entitlement spending, and hope the cave on cuts this year gives them an opening for … guess what?

Democrats feel they have been boxed by Republicans into a debate over cutting discretionary spending, which accounts for a mere 12 percent of the federal budget.

That’s actually incorrect. Non-security discretionary spending accounts for about 12% of the federal budget; overall discretionary spending covers more than a third of annual federal spending. The problem is that both Republicans and the White House have exempted security spending from the red-pen treatment as a means of political posturing on budget cuts. Without that, the amount of discretionary spending left to target drops to about $450 billion, or just a little more than a quarter of the annual deficit.

For this reason, some Republicans have proposed trimming defense spending as a means to build credibility on entitlement reform and social-service spending cuts. Democrats have the same idea for tax hikes:

Democratic lawmakers said they will be in a stronger position to offer tax increases after agreeing to between $30 billion and $61 billion in discretionary spending cuts for the rest of 2011.

“We Democrats have demonstrated that we’re willing to make these cuts; we’ve gone over halfway. Are they being so unreasonable to say we can’t raise any revenues?” said the senator.

They want to add a “millionaire surtax” as well as new corporate taxes on overseas operations, both of which the administration has rejected, although not enthusiastically. The latter would drive American multinationals to relocate overseas in order to retain their competitiveness on the global stage, and the former would chill investment into the American economy. But Democrats are betting that a little class-warfare populism will win in 2012, even if it utterly failed in 2010.

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How about a billionaire tax instead of a millionaire tax? Every billionaire out there is for higher taxes it seems. Bill Gates, Warren Buffet, George Soros. I’m all for a 50% tax on anyone worth $1B or up. You still get to keep $500M which is more money than you can spend in 10 lifetimes and you do your patriotic duty, per Joe Biden.

How about a billionaire tax instead of a millionaire tax? Every billionaire out there is for higher taxes it seems. Bill Gates, Warren Buffet, George Soros. I’m all for a 50% tax on anyone worth $1B or up. You still get to keep $500M which is more money than you can spend in 10 lifetimes and you do your patriotic duty, per Joe Biden.

angryed on March 31, 2011 at 12:27 PM

Not income taxes; if you want to see the very-rich howl, take apart the Family Trust tax loophole.

How about a billionaire tax instead of a millionaire tax? Every billionaire out there is for higher taxes it seems. Bill Gates, Warren Buffet, George Soros. I’m all for a 50% tax on anyone worth $1B or up. You still get to keep $500M which is more money than you can spend in 10 lifetimes and you do your patriotic duty, per Joe Biden.
angryed on March 31, 2011 at 12:27 PM

Big deal. Why not start taxing or confiscating retained wealth from the Millionaires and Billionaires. Then the wealth libs who have enough money to live comforably even if they never earned another dime would become conservative real quick.

Well, probably because you obviously think that just a wave of your hand gets you whatever you want, which means it is best of you to elect someone that can actually make reasonable choices.
It is sickening how far we have fallen economically, but a fat person doesn’t lose weight by just starving them, you put them on a diet, and keep the diet.
We need to have reasonable, consistent, tough, economic cuts.

…to add, once people see that the “cuts” don’t effect them, then more cuts will be easier. Once the people see the sky is not falling, than we have more support.
Many reactionaries yell at the man on the edge to jump! jump!, and others say, take the ladder…one is more exciting, but one is more prudent.

The total liabilities of the United States government, including future social security and medicare payments that the U.S. government is already committed to pay out, now exceed 65 TRILLION dollars, which is more than the entire GDP of the whole world…

… and the people responsible for this are quibbling over a few Billion, playing politics, and calling any responsible financial decisions “extreme”.

So their “cuts” aren’t really cuts. They cut now, and tax later…taking that money right back, and then off to spend, spend, spend. Which means…for Dems…nothing will change except what we’re supposed to cough up each year to keep up with their spending.

What we need is fewer “professional politicians” that are more interested in maintaining their political “career” and more people from business and industry who will get in there, do what needs doing, and then get on with their life and not worry about how their decisions might impact their political life 20 years from now.

That is one reason why Trump might actually make a decent candidate, he doesn’t have to worry about his poll numbers after he is elected, he isn’t a “politician”. He can ruffle all the feathers he wants to.

What we need to do is eliminate congressional pensions. Just completely eliminate them. No cushy retirement for having simply won elections all your life.

They want to add a “millionaire surtax” as well as new corporate taxes on overseas operations, both of which the administration has rejected, although not enthusiastically. The latter would drive American multinationals to relocate overseas in order to retain their competitiveness on the global stage,

That model has been tested and proved effective by (that evil) Halliburton. There would be a lot more.

Boehner said … without any reservations or hesitations at CPAC in February …

“Next week we will cut $100 BILLION from this budget … WRITE IT DOWN … we are cutting $100B and we WON’T STOP THERE!”

That’s what he said. That’s what he PROMISED.

The next week – he produced only $61B in cuts. Is it okay if I call the guy a liar?

And now …

He’s making a deal to slash even that paltry cut down to $33 billion?

And this is played as the White House “caving”??

Looks to me like the GOP is getting OWNED here!

Oh and … here’s another story that essentially says … “There’s a deal” between the White House and Boehner – when Republicans and Boehner have denied it. But, I’m more inclined to, sadly, believe the MSM report here because Boehner lies (see above).

Now I have a headache. It’s like I’ve said before, congress cutting out 33 billion is the same as me not buying a pack of gum. These guys just don’t get it, I’d hate to see how they run their own household budgets.

Senate Majority Leader Harry Reid’s office put out a press release this morning repeating Vice President Joe Biden’s announcement that Democrats and congressional Republicans have agreed in principle to a number for the budget cuts. The Reid statement says the cuts will be “$73 billion below the President’s budget proposal.”

But Reid can’t resist taking a few shots at the Republican-passed HR 1’s cuts and the more conservative members of the conference.”I appreciate Speaker Boehner’s participation in these talks,” Reid said. “I’m sure it’s not easy trying to negotiate with the Tea Party screaming in his right ear

They live on other people’s money. They don’t pay taxes, they don’t give to charity, they don’t pay fines, they have slush funds in the form of campaign donations that operate 24/7/365, they get sweet deals from friends who take chits, they wheel and deal with inside information, and they use their power of the purse to fund a golden parachute job in case they ever get the sack.

Budget is not a term they have need of and it shows in the federal one.

Well, probably because you obviously think that just a wave of your hand gets you whatever you want, which means it is best of you to elect someone that can actually make reasonable choices.
It is sickening how far we have fallen economically, but a fat person doesn’t lose weight by just starving them, you put them on a diet, and keep the diet.
We need to have reasonable, consistent, tough, economic cuts.

right2bright

Oh, WELL PUT!

Clear this fricking Democratic mess out of the way and put it TO them with the 20102 budget.

People keep forgetting we don’t HAVE both houses and you can’t do a D@MNED thing just ’cause you “wanna”.

This is the distraction that will prevail until we lose liberty. The ONLY way to fix this is to cut roughly 30% across all departments immediately, and fight over moving funds between departments and how to restructure programs later. Anything less is deckchairs.

The real battle will be over the 2012 budget. The Democrats know this, which is why they are trying to provoke a shutdown now over the remainder of the 2011 FY which ends September 30.

They’ve got half our people going bat-ship crazy over chump change, understanding that if we have a shutdown over this, even if they lose and capitulate, the politics will be changed for the real battle to come (“The Republicans want to shut down the government AGAIN!”).

But the suckers on our side are falling for it and clogging our Reps and Senators up with angry emails over pittances.

The prize is the 2012 budget, in which we can show in coherent fashion that the cuts can be made without turning Grandma into the street. We can de-fund NPR and Planned Parenthood FOREVER if we play our cards right.

Why don’t the Republicans simply propose a balanced budget for fiscal year 2011 instead of picking off spending in small chunks on the edges?

Old Fritz on March 31, 2011 at 2:33 PM

Because they fear the political and economic price that they and their family and associates would pay if they tried to cut 1/3 of the federal budget and failed. Until we get hundreds of thousands regularly marching in the streets for it, that’s not going to happen.